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Legislative Update

Deborah J Derrick Gass, PHR, SHRM-CP  | Published on 6/3/2016

Legislative Update - Final Rule on

Overtime Regulations

Hello Everyone,

I know that many of you have been paying close attention to the changes to the Fair Labor Standards Act (FLSA) overtime rules which impact exempt salaried employees, this morning publication of the final rule was announced. Several news sources estimate that just in Montana alone over 11,000 people may be impacted by the new rule.The effective date of the rule is December 1, 2016.

What are the key provisions?

The final rule focuses on updating the salary and compensation levels for exempt Executive, Administrative and Professional workers. The key provisions are:

  • The salary threshold for exemption status increases from $23,660 per year to $47,476 ($913 per week) annually for full-year workers. The figure it based on the salary level at the 40th percentile of earnings for full-time salaried workers in the lowest-wage Census Region.
  • The rule sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004), an increase from the previous $100,000 requirement.
  • The rule also establishes a mechanism for updating the salary and compensation levels every three years to maintain the levels at the above percentiles.
  • The rule did not bring about changes to the duties test.

Where can you find more information?

The final rule itself can be found on the Federal Register here:https://www.federalregister.gov/articles/2016/05/23/2016-11754/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and

The Wage and Hour Division (WHD) Department has a information page up at:https://www.dol.gov/whd/overtime/final2016/. On the site there are fact sheets on the rule, Q&As on the rule, and links to business guides and rules applicable to specific sectors like non-profit, higher education, and state and local governments.

WHD is hosting webinars onGeneral Information on the Overtime Final Ruleon May 26th, June 2nd, and June 9th, all at 11:00 a.m. MST and one specifically geared towards theNon-Profit Sectoron June 7th at 11:00 a.m. MST.

SHRM also has anFLSA Overtime Rule Resourcepage which has links to articles on the rule, guides on what it means to your organization, and tips on what HR professionals need to do.

SHRM is also hosting a webinar on May 19th at 12:00 p.m. MST onUnderstanding DOL’s New Overtime Rule.

I will be sure to keep an eye out for changing information and share anything I find in future updates. If there is anything you believe would be beneficial to the membership throughout the year, please don't hesitate to bring it to my attention. I can be reached at brittanywaiss@gmail.com.

Best,

Brittany Waiss,Legislative Liaison

Big Sky SHRM
PO Box 2105 | Missoula, MT 59806 |www.bigskyshrm.org


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